Continuous Subcutaneous Insulin Infusion (CSII) is superior to conventional insulin therapy as it improves glycemic control thus reducing the probability of diabetic complications. Notwithstanding CSII's benefits, insulin dependent diabetic patients rarely achieve optimal glucose control. Moreover, CSII is only FDA approved for 3 days and often fails prematurely for reasons that have not been fully elucidated. We hypothesize that phenolic compounds, such as m‐cresol and phenol, which are present in all commercial insulin formulations are responsible for the tissue reaction occurring at the insulin infusion site. This hypothesis was examined with in vitro cell cultures and a mouse air‐pouch model to determine cellular and tissue reactions following infusions with saline, phenolic compounds, (i.e., commercial diluent), and insulin. We demonstrated that diluent and insulin were cytotoxic to cells in culture at sub‐clinical concentrations (e.g., >1:10 of commercial insulin). Air pouch studies demonstrated that infusion of either diluted insulin or diluent itself induced three to five‐fold level of recruited leukocytes as compared to saline. At both 3‐ and 7‐days post infusion, these were predominantly neutrophils and macrophages. We conclude that phenolic compounds in commercial insulin preparations are cell and tissue toxic, which contributes to the failure of effective insulin infusion therapy.